Land Use, Land-Use Change and Forestry

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5.1.2. Characteristics of Projects

A LULUCF project can be defined as a planned set of activities within a specific geographic location that is implemented by a specific set of subnational or, occasionally, national institutions. These activities may relate to Articles 3.3, 3.4, or 6 of the Kyoto Protocol-and possibly to Article 12, should LULUCF activities be included for certified emissions reductions (CERs) in the Clean Development Mechanism (CDM). There are important differences, however, between the status of LULUCF projects, activities, and enabling policies under these Articles, hence between countries with and without assigned amounts (see Figure 5-1):

• Annex I Parties have taken on commitments to reach assigned amounts of GHG emissions by the end of the first commitment period, thus will have national GHG inventories and accounting systems in place to meet these commitments. Articles 3.3 and 3.4 impose limitations on which LULUCF activities are eligible (see Chapters 2, 3, and 4); a project-based approach is possible under Article 3.4 (Chapter 4). The national assigned-amount commitment may allow Annex I Parties to account for emissions reduction or sequestration across Articles 3.3, 3.4, and 6 as lands or activities move among the Articles-potentially minimizing the risk of leakage of GHGs (see Section 5.3.3).
• Policies by governments, the private sector, or nongovernmental organizations (NGOs) can facilitate or hinder the socioeconomic and policy conditions that are likely to encourage the diffusion of LULUCF activities or projects. For example, land tenure, agricultural subsidy, and timber concession or taxation policies have a strong impact on the financial and practical feasibility of many forest or agricultural activities that could generate GHG benefits, such as rates of deforestation or afforestation (e.g., Repetto and Gillis, 1988). These policies are not likely to directly produce emissions reductions or sequestration under Articles 3.3, 3.4, 6, or 12, but they may produce enabling conditions.
• Under Article 6, emissions reduction units (ERUs) in Annex I Parties can be generated only by LULUCF activities that are organized as projects; under Article 12, certified emissions reductions can be generated only by projects, which may include LULUCF activities.
• Thus, LULUCF activities that are not implemented as projects are likely to be excluded under Articles 6 and 12. Dispersed, individual actions of land users and beneficial policy changes that are not instituted as projects and may have dispersed GHG impacts but cannot be readily measured and verified are not likely to be included in these Articles unless they are specifically organized as projects.

Many potential LULUCF project activities, taken together, can reduce net emissions of a wide range of GHGs. Project experience to date, however, has been limited mostly to reductions in carbon emissions and enhancement of carbon stocks, as well as forestry operations. This chapter therefore concentrates on carbon and forestry, although it refers to other gases and types of projects where pertinent and where information is available.

Figure 5-1: Relationships between LULUCF projects and key elements of the Kyoto Protocol (ERU = emission reduction units; CER = certified emission reduction). GHG benefits must be additional to the no-project case.

There are three broad categories of LULUCF projects, each with a variety of subtypes:

• Emissions reduction through conservation of existing carbon stocks: For example, avoidance of deforestation or improved forest management-including alternative harvest practices such as reduced-impact logging or fire and pest protection.
• Carbon sequestration by the increase of carbon stocks: For example, afforestation, reforestation, agroforestry, enhanced natural regeneration, revegetation of degraded lands, reduced soil tillage and other agricultural practices to increase soil carbon, or extended lifetimes of wood products.
• Carbon substitution: For example, use of sustainably grown biofuels to replace fossil fuels or biomass to replace energy-intensive materials such as bricks, cement, steel, and plastic.

The eligibility of these different types of LULUCF projects under the Kyoto Protocol and many of the rules that apply to them still have to be decided and formulated. The outcome of this policymaking process will have a large bearing on the potential-and costs-of LULUCF projects as a means of mitigating GHG emissions while contributing to sustainable development.

The very concepts of LULUCF mitigation projects generally and joint implementation (JI) projects specifically-projects that mitigate GHG emissions by Annex I countries in non-Annex I countries, established under the United Nations Framework Convention on Climate Change (UNFCCC)-have been challenged in a growing body of literature. Critics raise three general sets of questions (e.g., Maya and Gupta, 1996; Mulongoy et al., 1998; Lashof and Hare, 1999; Smith et al., 1999). First, do LULUCF projects provide measurable, verifiable, long-term GHG emissions avoidance or reductions? This concern relates to projects' ability to construct reasonable, empirically based, without-project baselines and to quantify leakage of GHGs across project borders to other areas or markets. Second, can LULUCF projects meet tests for sustainable development and be compatible with national sustainable development priorities? Should other policy tests be required for their use under Articles 6 and 12? Third, under what policy circumstances might LULUCF projects be used in the Kyoto Protocol to provide Annex B certified emissions reductions? Should they be limited to fostering energy sector emissions reductions? The technical issues raised are addressed in the following sections.